What happens to the equilibrium price level

Reference no: EM133438987

Question: Suppose the following occurs: (1) There is a decrease in income because President Biden decides to raise income tax rates on consumers, (2) and at the same time, the Environmental Protection Agency restricts the amount of houses that construction companies can build. (3) the shift in the AD curve shifts more than the shift in the AS curve. As a result, what happened to the equilibrium price level, equilibrium Real GDP level and the unemployment rate? Please make sure you explain what happens to the aggregate demand curve if it shifts rightward or leftward and the aggregate supply curve shifts rightward or leftward and what happens to the equilibrium price level, equilibrium Real GDP and the unemployment rate as a result. Please use a graph and words to explain your answer.

Reference no: EM133438987

Questions Cloud

Did you find the class difficult or interesting : Did you find the class difficult or interesting? What did you think about the quizzes, assignments, discussions, and the final? What would you tell new students

Lobbying the government is a new concept : Lobbying the government is a new concept for many. Can you identify in the news current issues that are being lobbied? How could you use lobbying in your work

What precautionary steps should a person take before : Do you think we should be encouraging young adults to open credit card accounts? What precautionary steps should a person take before opening a credit card

Exclusion strategies employed by the canadian state : what is the relationship between detention, human mobility, containment of unwanted immigrants, bordering practices, and exclusion strategies employed

What happens to the equilibrium price level : what happens to the equilibrium price level, equilibrium Real GDP and the unemployment rate as a result. Please use a graph and words to explain your answer.

How does high inflation impact people income : How does high inflation impact people's income? And what would happen to the economy and its GDP if inflation rates continue to rise?

Determine each consumer current consumption : Determine each consumer's current consumption and current saving b. Determine aggregate private saving, aggregate consumption in each period, government

Privately about important matter : Clark's supervisor has asked to speak with him privately about an "important matter." Clark is a unionized employee.

Describe the process in the money market : Describe the process in the money market by which the interest rate reaches its equilibrium value if it starts above equilibrium.

User Account

All Pages